Chancellor John Healey MP delivered his first Budget on 28 October 2026. He described it as a Budget built on "fiscal discipline" to give Britain some "breathing space". So, what are the takeaways for private client advisers?
Some of the key announcements include:
Property and savings income: From 6 April 2027, the rates applying to property and savings income will be 24%, 44% and 49%, an overall increase of four percentage points from current rates.
Cash ISAs: The proposed reduction (to £12,000) has been scrapped, and the annual cash ISA limit will remain at £20,000. The Government will also explore a new incentive for first-time investors in stocks and shares ISAs.
Business Asset Disposal Relief: From 6 April 2027, the BADR lifetime limit will fall again from £1 million to £500,000.
New Founders’ Relief: Qualifying founders of high-growth, innovative companies will benefit from a 10% CGT rate on up to £10 million of lifetime gains from 6 April 2027, subject to the detailed rules following consultation.
Pension death benefits: The two-year rule is being removed, so beneficiaries will no longer become taxable solely because qualifying pension and lump sum death benefits are paid more than two years after the member's death. The change applies to payments from 28 October 2026.
Inheritance tax and trusts: The Government will amend the rules governing the deduction of liabilities connected with trust property to reduce the value of assets for inheritance tax purposes, including strengthened anti-avoidance provisions, for deaths and other chargeable events from 28 October 2026.
Lifetime ISAs & new First Time Buyer ISA: From 29 October 2026, the withdrawal charge for a first-home purchase above the £450,000 property cap will reduce to 20%. A new First Time Buyer ISA is also planned from April 2029 and will provide a 25% government bonus up to a maximum of £20,000.
Key Budget takeaways
For private client advisers, the changes to BADR, Founders’ Relief, property and savings income and the IHT treatment of trust liabilities are likely to be particularly important when reviewing existing succession and estate-planning arrangements.
As always, the detail will matter as the Finance Bill and draft legislation develop.
If you’d like advice on any of the topics mentioned above, please contact one of our private client experts.
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